Another Bank of England hint that buy to let mortgages will get tougher

The Bank of England Governor Mark Carney is the latest influential figure to hint that there may soon be additional restrictions on landlords’ abilities to obtain buy to let mortgages.

In an interview with the Financial Times, Carney said he was concerned about high levels of lending for buy to let mortgages, highlighting a possible risk that large numbers of investors would try to sell at the same time if house prices slumped.

"So we do have to be careful around that sector. And I think collectively there are a number of things happening and we are watching it, we are watching it closely and we will take action" Carney told the FT.

Letting Agent Today has recently reported on a string of other hints that buy to let mortgages would become harder to obtain. 

The Bank’s latest Financial Stability Report says the BoE is not going to look favourably on any relaxation of the lending criteria being offered by mortgage companies, such as reducing the size of deposits or income requirements. The Financial Policy Committee of the BoE says “potential developments in [mortgage] underwriting standards as the sector could pose a risk to broader financial stability." 

Landlords have reacted angrily to the latest hint at restrictions.

Richard Lambert, chief executive of the National Landlords Association says the BoE should be concerned about the future of buy to let because this government is pushing many landlords to the conclusion that they have almost no other option than to sell up.

“There are still big questions as to what the Governor has in mind to 'tackle' buy-to-let, especially given the role George Osborne has played in significantly cooling the market in recent months. Mr Carney has an important and very difficult job to do, but repeatedly and publicly labelling a sector which plays such an important role in supporting economic recovery as dangerous is hardly helpful” claims Lambert. 

  • Commercial Trust

    If the government wants to be able to fulfil its housing obligations, it should be very wary of discouraging private property investors. If the goal of intervening in the market is to prevent another price crash, then reducing the rental stock is a counter-intuitive move, as rents will rise whilst homes become no more affordable.


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